Half Year 2021 HUTCHMED (China) Ltd Earnings Call

Next slide please slide number 3 the.

The agenda today.

What I'm Gonna do is I'll take you through this presentation hopefully in about 35 minutes it'll be relatively rapid fire.

Updating on everything.

And then we'll open up for maybe half an hour of Q&A.

At which point all involve the broader team in answering some of your questions.

So the agenda today, we have first of all overview and highlights of whats happened in the first half.

Some focus on our regulatory achievements.

In our commercial operation progress.

A key pipeline updates.

A brief summary of the upcoming events over the balance of the year and into 2022, and then a brief look at the financial.

Picture.

From the company.

Slide 4 please.

So now on to slide 5.

A slide that gives a high level.

So the summary of what we're trying to do as a company.

Hutch Med is very focused on trying to build a global science focused biopharmaceutical company.

Proud China based company, but.

Our vision and our ambition is very much global.

You can see the 4 kind of key areas that we're working in the first in Blue There is drug discovery and manufacturing we base all of our drug discovery and manufacturing operations in China.

It's not it's time.

With World Class people and world class facilities that they're able to create novel drug innovation for the global market and then supply not novel drug innovations of the global market. So are based in China of discovery and manufacturing I think is a very.

Central.

Well to the to the.

2 our global strategy.

Second line that you see in Red.

Is the clinical development and regulatory operations that we've built out we've always been well positioned in China, but over the last 3 to 4 years now we've built.

Central very strong team in the United States, that's able to cover Europe, and Japan, and manage clinical development of our assets and regulatory operations of our assets in these ex China markets. So that's a critical aspect to our ability to bring.

Built automation to the global market is is to be able to effectively develop those programs.

And interact with the regulatory authorities in each of those.

The international markets.

And the Green line there you see we prioritize building out our own in house.

Our international operations in key markets really the 2 key markets for arch Med Ah, China and the United States.

These markets represent about half of the global pharmaceutical market.

So.

This pipeline approach, we have a building a portfolio of targeted therapies that that can that can be combined with each other is really starting to play out now on.

On the organizational progress.

International R&D organization in U S commercial team continues.

About preparing for sewer 5 launch hopefully next year early next year.

It's not just certain classes that we've got from Clintonite. Following following in 2023 and and also 689.

We believe has great potential.

So for.

Or for a rapid.

Pathway to approval in the U S. So we're building that team for a number of assets.

The China commercial team is scaling rapidly up to now 540 people by the end of this year will be over 600 people.

We're building a flagship manufacture.

It's a building facility it's going to.

The increase or a small molecule capability by fivefold over fivefold.

Also establish a large molecule CMC platform.

And finally on the cash side, we're currently sitting on our cash and resources.

Factors of about $1.2 billion in U S. As a result of our Hong Kong listing recently and also the divestment of our over the counter drug Christmas.

Next slide please number right.

Number 9 thank you so a regulatory achievements I won't repeat myself.

But you can see here 2 approvals for <unk> 1 in early 'twenty 1.1 just recently in June.

Oh path its approval in June and the NDA submission in the U S and EMA MAA submission in Europe.

It all happened really in the first half of this year. So a lot of activity next slide please slide 10.

So a brief update on the commercial side.

On the left hand side of Slide 10, you can see that the oncology team really has built up rapidly.

18 months, I mean 18 months ago, we had 70 people in our oncology commercial team now it's 540. So it's a young organization that's been growing very rapidly. It is it is operated by some very high quality individuals with deep experience in and operating large commercial.

Actual teams across China.

We're now covering 2500, plus oncology hospitals and clinics and over 29000 oncology physicians and so it's a it's a deep pool of of commercial capability. It is supported by 2 of our other affiliates.

Which have deep commercial infrastructure in China as well. So you know hutch might has always been a capable commercial operator in China and now ecology being our focus is really coming to the poll on the right hand side of the slide you can see that.

The scale.

Will scale up even quicker.

Then as shown in the Bar chart, if if the business justifies it.

You know, there's no limitations as to how fast we can grow the business is growing well, we'll build out the team to support it but.

But we have high expectations on productivity so the last bullet point.

You can see we're targeting to reach about 400000 U S. A.

Productivity per year by 2023 for a sales rep. So we're not just blindly expanding there are productivity targets involved.

Slide slide 11.

Yeah.

So for Quintanilla, Yeah, it's been a terrific first half for frequent genetic we took over last October.

You can see the red bars here, a hutch meds involvement so on the left you can see in 2020, the sales of emanate with 33.

We took over the last quarter at about $10.2 million in sales.

So you know relatively modest growth last year.

Until we took over but if you look at the first half there you know we've seen almost a tripling of the business of 186.

The same growth from $14 million in the first half last year to $40.1 million.

In in market sales this year.

Which we consolidate $29.8 million so about 75%.

Roughly of the sale so as we've always indicated.

The sales team is doing a great job.

We've run over 5000 educational and scientific events are in.

In the colorectal cancer space in the first half of this year.

You know, it's a big patient population 83000, new patients in first line and we estimate that we treated about 9.

Some patients in the first half so that's probably a little bit over 20% 22, 23% penetration. So there's still a lot of upside yeah, but it is a competitive space.

We are well positioned to.

To compete slide 12 please.

You can see.

9000.

Reason for that growth is driven by increasing our hospital pharmacy listings to about 400.

In China, it's over a double double over double from when we took over from Eli Lilly last October 1.

The commercial team has tripled or quadrupled.

Right.

Covering.

With twice as many oncology hospitals and a much broader geographic.

Geographical footprints as well.

So looking forward.

You know <unk>.

<unk> does have some some pretty important.

And Sciential, there's a lot of colorectal cancer patients in China over 500000.

Second third line patient populations, increasing quickly we're very excited about the PD 1 combo data that that is that that's starting to get emerge.

And we're running a lot of investigator initiated studies.

To to explore expanding.

So quintin it all emanate into into other patient populations and finally, Oh phase III in second line gastric cancer. It is still ongoing should complete enrollment around the end of this year. So there's a lot of opportunities for ilmenite still next slide please page.

As to page 13.

So under a very brief update them. It's very early we've only really been commercializing Savannah in China for a little bit over 5.5 and a half months.

If you did about $8 million of sales in the first half.

At about 2000 patients.

We conducted.

Launch launch activities on the local regional national level involving over 12000 health care professionals.

Yeah, it's still early but we're we remain really quite optimistic about.

Treat them, but now you have to remember that salon. The current pricing is around 2000 words around 17000, RMB a month and not to pay it all out of pocket. So we're not on the NR D. L. Yet we are considering and all D. L negotiations.

Later this year, we will determine.

Based on how those negotiations go whether we whether we whether we're going to go ahead and take the whatever is the necessary price reduction to get on the <unk> or potentially.

Potentially continue using our early access and patient access programs into next year. So we'll see how that plays out.

Over the balance of this year, but.

You know I think it's a good start for solander and we'll see this this momentum.

Momentum continues to build as our team gets stronger.

Next slide please slide 14.

So our process is the first selective met inhibitor approved.

In China, it's been a terrific a.

Months ago, too we received approval.

In late June, which was very important because that allows us to get.

Into negotiations and eligibility for the 2022 and IDL for biopsy. So we're hopeful that if we can negotiate.

A fair.

Situation with the regulatory authorities or pockets can be can be included in next year in January.

16 days after approval, we shipped our first product and have since you.

You know prescribed who prescribed 40.

Patients on day, 1 which is most no mean feat given the price of of or Pat. This is it's quite high at around 5300 U S dollars per month, So you know.

It's a great program.

Relying on Astrazeneca to commercialize or pockets in China, there as you can.

See from the right hand side of this slide the very big in China number 1 of them and seen China and old pockets fits really well into that lung cancer franchise.

So we're very optimistic.

Obviously, the first sale will trigger a 25 million dollar milestone. So that's very helpful. As well next slide please slide.

60.

I'll pass it has extensive publications across many tumor types with in a really high quality data in each of them, whether it's kidney cancer lung cancer or gastric cancer.

And as I said earlier, we have 5 studies now.

On the right hand side of this chart.

That <unk>.

Registered <unk> studies that should be kicking off over the second half of the year with the gastric cancer study.

Having started just in the last in the last couple of days actually today and yesterday it was.

So.

This is not a.

Hi.

That has a limited.

Treatment history, it's been it's been studied in many many ah patient settings, and we're quite optimistic as to it as to its potential in the market, we'll talk more about that on the next slide slide 16.

This.

Building block slide that shows all of met driven patients across many solid tumor settings, you can see in the brown box in China met exon 14 deletion non small cell lung cancer about 13000, new patients a year.

This is just a fraction of the board.

Met driven patient population and so this.

This is about I think those are a very high level job.

Identifying.

What other patient populations of most interest you can see it in the Red Red boxes. These are these are patient populations that we are initiating registration studies in.

But pink boxes.

This chart most likely.

These are our patient populations that might benefit from Oh passes is that physicians are prescribing off label, but obviously that's up to the physician to determine if that patient is is appropriate for this therapy.

Really.

A big patient population for our partners in China and outside next slide Please slide 17.

Okay, and finally on the commercial side, just an update on the U S. Commercial organization that continues to build out in preparation for the launch of <unk> next year for <unk> the year after.

We've really built out the senior management team ready to to.

Set the strategy.

For for launch and it's not just on the sales side. Its only other ancillary functions that are that are now in place regulatory affairs Medical affairs quality safety.

You can see that down in the second.

<unk> side of this chart so our U S commercial organization on clinical regulatory team are really making great progress now close to 100 people on the ground in the United States and our satellite organization.

In Europe as well.

Our next slide please.

So clinical development update page 19, a brief update on sort of fast and Ed just to just to reiterate its unique mechanism of action.

The the Egfr <unk>.

<unk> hundred <unk>.

<unk> inhibition. So that's what makes <unk> unique next slightly.

Great data on slide 20 that was presented at ash for the supercontinent toward Palomar combo.

Neck and gastric.

These are these are.

Strong data that are leaving.

At that point us to make decisions as to.

The registration studies, particularly in NEC.

But there are multiple other indications where we're studying at the moment in a place to publish more data on that later in the year next slide please.

They don't have to go quite quickly here, because where we're running short of time so.

Leaving I won't go through this slide in detail, but China very active on the PD, 1 combos and the.

Studies I think globally the team working very hard on the European and the U S NDA and also.

The PD, 1 combos with losing the Beijing PD.

1 in a number of indications.

Next slide please.

For <unk>.

Mechanism of action highly selective Egfr inhibitor.

Potent against Egfr, 1.2 and 3 and designed really to be used in combinations because of that unique safety profile.

Its ability to be combined with chemo other targeted therapies or immunotherapies is ruling in our view.

Difficult to beat next slide please slide 23.

The fresco study is probably our biggest global phase III that we're running at the moment the U S team and our European.

And also through partners in Japan, managing this very big global Phase III the.

The regulatory interaction we've had in Europe, the U S and Japan.

US gives us a high degree of confidence at this fresco 2 study is successful it should support.

A a good a good label third line and above metastatic colorectal cancer. So.

Very important global study for us over 680 patients should be completing enrollment in those 14 countries and 150 sites by the end of this year.

Slide 24, please next slide.

The data we share that Oscar for quintanar than the PD ones in colorectal cancer was very encouraging.

And we are now moving forward to consider our next steps for this encouraging combination in colorectal cancer.

We're also looking at.

Some of the other indications endometrial cancer being 1 where we've seen terrific.

Synergy between <unk> and the PD 1 antibodies, so we'll be moving forward into registration.

In that area.

Next slide please slide 25 mm again I'll touch on this very briefly China. It's the fatigue that study completed enrollment late this year continuing work on the PD, 1 combos and a lot of exploratory studies ongoing for <unk> in China I think globally.

Completely.

I think the fresco phase 2 enrollment.

Enrollment.

And and expanding the PD, 1 combo with again with Tims Elysium up in Beijing.

For coincident.

Next slide please so tabulate to Nab I won't go into a lot of detail here other than to say we treat.

Complete 1200 patients with satellite to them over the last 10 years, that's a lot of patients.

We're now first in class selective C met inhibitor in China, and as I've said before we are expanding into multiple global registration study next slide please slide 27.

Okay.

The big 1 will be the lifting of debris so combination Ah.

<unk> taps and studying was published its final final publication at World Conference on lung cancer early this year that's terrific data.

And very broadly.

Yeah.

Understood and the oncology lung.

Lung cancer community.

Are very aware of this data.

The Savannah study will come to its conclusion at least we'll be able to determine all our phase III design for the cyber degrees are global.

3 study in the next month or 2.

While we will focus on the dose regimen the target patient population the diagnostic tools, the biomarker strategy and I think we're in a very strong position working with Astrazeneca to conclude.

What is the optimal design for this global phase III.

Next.

Slide page 28.

I'm personally very excited about the met driven papillary renal cell carcinoma data, we presented at <unk> 50.

57% response rate the current standard of care Sunitinib that has about a 70% response rate in these patients. So this is really step change.

<unk> efficacy improvement for patients with met driven papillary renal cell carcinoma.

You know in our in our Calypso study you can see that our median overall survival for these difficult patients of 27.4 months.

That's relative to you know just.

Just over a year for patients today with Sunitinib. So it's a big step and we'll start our global phase III and met driven plc see very shortly hopefully in the next month or 2.

Next slide please page 29.

Sovereign development summary, I won't go through this in detail, but the approval.

Excellent <unk> started 2 big phase threes.

With the degrees so combination in China. The Sochi study the Synovus study the gastric study that just started this week and then globally, our global met positive plc.

3 the tomato study and then the.

The phase III that comes off of savanna, which is the big registration Global registration study, hoping we can start that later this year.

Next slide please slide 30, 689 I'm just.

Patrick had delta. We include this because it really has now moved into late stage.

You know, it's it's unique and it's and it's isoform selectivity its potency on the whole blood level.

Really.

Unique and improved pharmacokinetic profile so.

This is a really in our view a really unique therapy and this payout.

Delta space that that should be able to.

Differentiate itself versus everything that's there today.

Next slide please.

So this is just the phase 1 dose escalation data is about 56 patients are we've published as stated before what's import.

Rick Nadeau is since this data was published at Ash last year, we've enrolled.

Well over a 100 patients.

At the.

The recommended phase II dose.

Also in the U S and Europe.

Now almost reached.

Our our recommended phase 2 dose and are just about ready to move into expansion outside of outside of China. So things are moving very quickly on 689, and we intend to publish more data hopefully at Ash later, this year and that should be a meaningful dataset.

We present irrationally to later this year next slide please.

Yeah.

So.

Yeah page page 32, I just already mentioned this I mean in China for 689, we've moved into registration studies.

In Q2 of this year in Follicular lymphoma.

In marginal zone lymphoma.

These studies have potential for NDA submissions.

Next year or early 'twenty, 3 so that will be hopefully our next major novel drug NDA submission in China, and we're looking at a bunch of combinations.

These.

B cell signaling pathway targets are all related in 1 way or another and where we have a superb portfolio now with the third generation be today, the delta the sick inhibitor.

And a number of other assets that can also create synergy.

And then outside of China.

We will engage.

American is team will engage with the FDA later this year, bringing together all the China data there are international dose escalation data will go talk to the FDA about about you know how to move this asset as quickly as possible and in the markets outside of China. So we're very excited.

This next slide please slide 33.

So the next wave of innovation 523, sick inhibitor moving into a phase III.

At <unk> P M.

On the indolent non Hodgkin's lymphoma side, we're making great progress outside of China looking at.

Ah patients that are <unk> inhibitor refractory those seem to be the patients do best on a sick inhibitor.

The <unk> inhibitor I'm moving quickly the the third generation PTK inhibitor 760, <unk> just got the RMB clear those are the last week or so so that will move into the clinic later this year.

The RK inhibitor moving moving nicely.

Don't forget the <unk> inhibitor <unk> 3 continues to to enroll in intrahepatic Cholangiocarcinoma and we've just study that we just.

<unk> submitted an IND.

Into combinations.

Combinations with checkpoint inhibitor in certain areas. So a lot going on on the early side.

Next slide please slide 34.

35.

Again I won't go through all of these things.

Our upcoming events on page 35.

5 you can see the the most important ones are highlighted in red dead. So obviously on sort of a partner that's been the NDA submission in the European.

Ultimately next year the European launch in the U S launch frequent internet for Ensco to read out.

Next year, but completing enrollment.

Late this year sidebar, there's a lot going on this year with a with data from Calypso.

And kicking off the global phase III in papillary renal cell carcinoma.

2 recent comeback.

And then going down the list it's just the.

The general progression of the of the broader pipeline with probably the regulatory dialog on 689 being the most important for us.

Next slide page 36 is the China upcoming events.

You know.

Many of them have happened already with the serene launch the sovereign launch.

But still a lot going on so sort of finance the near endocrine carcinoma gastric PD 1 combos that data was published as I mentioned now we're starting to look at okay. How can we start registration studies in these areas or some of these areas the.

The same can be said for frequent to them.

Enrolment of fatigue, completing late this year and then save.

3 registration studies kicking off this year gastric.

And Sochi and Sonoma.

And then 68.9.

These these these registration studies in China, 523, also hoping to start phase.

3 late this year as well so a lot happening.

Next slide please slide 37.

I'll pass over to slide 37, just to say that summarizes it 10 phase III starting in 3 new drugs coming in.

On the.

If you can go to page 39, yet so on.

The standpoint consolidated balance sheet.

At the end of June we had $950 million that didn't include the over allotment from the Hong Kong IPO, the $25 million milestone on 1 passes and it didn't include the 150 or so million we should receive in the next few months.

Okay. That's 1 of our OTC business, so that puts us up to around $1.2 billion in cash and resources.

You know we've kind of we've had are unimportant first half in terms of equity financing the strategy to bring in some key strategic investments such as bearings private equity Asia.

Last year.

The Canadian pension plan investment Board and General Atlantic and then Carlyle around the Hong Kong IPO. These investors are really important to the company and are supporting us in our activities.

Slide please.

Slide 4.

I'm on slide 39, if you move to slide 14.

He.

It doesn't it's not.

Is it already for you it's not for me.

On <unk> for me.

Okay, well I'll, just with smart in front of me, so I'll just sort of speak from.

I'm sorry.

So on slide 40, just talks about our guidance for the year of 110 to 130 billion U S dollars guidance oncology revenues.

Obviously that comes from for <unk> through a partnership and save our we've got.

The first sale milestone in may of 'twenty.

Remember a million on Saba as well yeah, I think we're on track for that guidance this year and expect to expect to deliver.

Next slide please slide 41.

I also can't see slide 41, so I'll have to go from memory as well.

Oh, there you go I've got it now.

So you can see.

Yeah, R&D expenses, increasing oncology revenues, increasing I'm sorry.

It's just a reflection of our strategy of bringing our oncology assets to market building out our.

Profitability from those oncology assets and helping pharma a lot profit into broader.

R&D investment against our broad pipeline so.

You can see we've talked a lot about sales so I won't talk anymore about that but on the R&D expenses side, you can see around 120.

$3 million of R&D investment in the first half of this year around $50.50, a china versus outside China.

And so the investment in our U S. Europe R&D activities is really increasing has tripled in the last year.

And that's because we're now developing.

6.

Fixed assets actually now with the <unk> inhibitor 7 assets outside of China. So.

The net loss attributable Hutch Mad are around $102 million that still you know is contained because we have our other ventures that that you know in the.

First half of this.

Year, we're able to.

Generate around $43 million in.

Equity in earnings from our equity Investees. So are other ventures business. So.

We've always been able to increase our R&D spend and offset it by the profits of our commercial businesses next slide please.

Slide 42, I think this is the final slide.

It's stuck again, I think Bob but anyway.

Final slide just looks about the ambitions of the company.

How are the the kind of numbers, we expect to be delivering we expect by 'twenty 5 to have 9.

Mind therapies launched in China, we've already got 3 launched.

We expect 5 to be launched outside of China, and we expect.

You know another 6.

<unk> therapies to be in registration studies by 'twenty 5 outside of China in mind inside of China. So that if we're able to deliver these kinds of <unk>.

Numbers <unk> will be a very big company by 2025, and I'm fully of the view that we will be able to deliver these kinds of numbers. So.

I took a bit longer than expected, but let's let's open it up for questions.

And Greg if you could if.

You could direct your questions and I will either answer them all involved.

My team or the team to answer.

Yes, yes. Thank you we are going to start the Q&A session. If you wish to ask a question. Please press.

Oh and 1 on your telephone keypad.

First question from Alex <unk> from.

Couple of America. Please go ahead.

Hey, guys. Thanks, so much for taking our questions first 1 for me you recently got the I N D clearance for your beat Teekay and your Erk program starting phase 1. So I guess you know given these are increasingly crowded areas of development.

But can you help frame the thought process that went into these programs in terms of what you think it could take to be best in class and whether you think monotherapy will.

It will be enough for or will you focus really be more on the combos.

And then secondly on the catalysts roadmap that you presented it looks like quite a few.

The PD 1 combo data should be expected later this year. So do you have any more granularity on timing or venue for for that data. Thanks.

Thanks, Alex and maybe I'll ask <unk> to to talk about the sort of a differentiation in the morning.

Could you have a question with regards to beat you cannot.

It may be myrick can could pitch in around how he's thinking about developing for.

For example, the PTK inhibitor in a in a relatively busy field.

So go ahead Michael.

Well yeah. Thanks for the question.

On the cost of it.

Generation Z teekay and targeting.

<unk> resistant mutations as well in addition to wild type. So it is clearly different from when.

When we have first generation of Ibrutinib and second generation Airlines.

So this is a rather.

Completely new general aging and love to see as you know.

Monitors of this type in clinic at this point it will.

It will it's designed to overcome that resistance, particularly with the C suite.

Yes.

Yes.

Obviously given the.

Pipeline.

Roche company and we are investing heavily in B cell signaling. So in addition to <unk> you know we already have but that's weird delta in S y K.

Also working on.

<unk> antibody and also a <unk> based bispecific so.

This P T J.

Inhibitor will be really a part of all.

A very.

Valuable portfolio of compounds targeting.

Covering for all of these.

Hematologic malignancy space so.

For instance, we are.

We already generated in house data combining.

This PTK inhibitor with all its yesterday so for instance in VLT sale.

Others. So.

Obviously.

We have high hopes for this compound in terms of both.

As a monotherapy and also in combination with our own portfolio.

As a Christian what I pointed out.

Just clear the A&D in the U S will initiate the <unk>.

And very soon and then.

Uh huh.

China, it's relatively.

At the same kind of same timeline.

Thanks, well maybe America.

Yeah. So just just to add Alex. Thank you for your question.

Question.

Building on worldwide based on our strong differentiation factors based on preclinical data. Obviously, we have very ambitious plans to explore trade you know what I'm, saying.

Scientifically based on driving our future plans, we're taking road map to really.

Translate into clinic, where do I go set based on our hypothesis.

And they really are meeting with high interest from global thought leaders.

Paging in this program to have a coffee is a world renowned client.

So we have taken over the.

That's.

You'll notice publishing pay for those.

And the escalation in place and Ah trial will have multiple cohorts a specific set of things. That's why I can highlight that a number of.

Cosby Teekay resistance.

Subsets and multiple types of thoughtful lymphoma.

And as Ray said, we are also in parallel going to think about combining.

Craig trading signals from our own assets.

Mechanistically and scientifically makes sense here now.

Tricky Delta is 1 of them, but we are looking at many other possibilities.

So we are very excited.

Neither of the crowd than that.

All of the space.

So significant amount of amendment.

And we need to and the fact that the top notch scientists are very interested.

Explorer is 1 of the factors probing that obviously won't be.

Driven by data so stay tuned.

Thanks Ryan.

I I will kind of finish off the part the first part of your question Alex around arc and.

How do we think about the map kinase pathway in mono combo et cetera.

You know we we.

It does tend to do for the map kinase pathway, what we've done for the B cell signaling pathway, which is build a portfolio of assets that can.

Influence influence those pathways in combinations oriented in regimens 1 after the other et cetera. So.

We have a toolbox to attack.

The map kinase pathway the same way that we build the toolbox to to attack the b cell signaling pathway. So the archon neighborhoods, the first asset coming through and there'll be there'll be multiple other.

The novel therapies.

Therapies that why go into.

We are working on that will that will add to that.

And you know.

I think that's what's most exciting about the erk inhibitor is just the first of many assets that we plan to to develop and discover and develop in that pathway.

Okay.

In terms of the last part of your question on the kind of catalyst rich.

You know second half and early next year and the PD 1 combo data.

We've only put out relatively limited PD, 1 combo data to this point, we have a lot more in the law.

And 2 other indications that sort of maturing.

Some of those indications are very exciting some some less so but I'm sure that we will we will as that data matures and as we formulate our registration strategies, we'll find the right scientific events.

Put that data out so I'd expect a steady stream.

Stream of PD, 1 combo data to play out over the over the next 6 to 6 to 9 months basically.

Yeah.

Great. Thanks, a lot and congrats on all the progress.

Thank you Alex.

Thank you next question from Louise Chen from Cantor. Please go ahead.

Hi, Congrats on all the progress this quarter and thanks for taking my questions here I'm, sorry, I had a few first question I had for you is how do you plan to differentiate yourself in the U S market as you rollout your business, there, especially compared to other oncology biotech companies here in the states and then.

Second question is how should we think about the peak sales the global peak sales potential for saddle at Nab and non small cell lung cancer and kidney cancer and other important indications and then last question is what are your thoughts on the new draft guidance for oncology drug development in China do you see this as a tailwind or a headwind and why thank you.

Thanks, Thanks, Louise maybe I'll take the first the first couple and then I'll ask Greg to talk about the guidance.

And in China.

So how are we how are we going to differentiate ourselves in the market.

And on my right. Please add to this if you have any other.

Additional comments, but my view is were quite differentiated on a number of levels number 1 is each of our each of our assets that we're bringing to the market is differentiated in its own way so certified.

<unk> therapy of its type in.

And your endocrine tumors.

For Clinton AD will be differentiated.

By virtue of its hopefully of its safety profile.

The efficacy and 6.8 line well that again is differentiation based on them are really quite different safety profile from the other delta so yeah.

On a compound by compound level each of these assets has been designed to be differentiated.

But I think relative to other.

U S based biotechs, which generally are companies with a single asset.

Portfolios you know that's the difference.

Difference for Hodgkin.

We're building our commercial team in the U S. Yes, hopefully sort of fighting that will be the first approval bought 12 months behind that maybe 12.18 months behind that will come from <unk>.

And maybe another 12 months behind that will come.

9.

We differentiate ourselves.

By having that portfolio of assets that that hopefully will come just as we've done in China with sort of fat in their frequency and their travel isn't it.

This is not about a 1 product company. This is about bringing multiple assets to the market and that's how we will differentiate ourselves and compete in the United.

States is by by having that broad group of assets.

On the peak sales for tablet to Nab him. This is a you know that's.

On a very high level I, you know I think obviously, it's I believe it was going to be a multibillion dollar global drug if it's successful in combination.

Asian with degree side, it was probably the biggest indication globally.

But I think our I think the secondary indications of papillary renal cell carcinoma gastric cancer.

And all the other met driven patient populations are really important so but clearly clearly the degree so combination.

In Egfr mutation positive non small cell lung cancer is going to be the big 1 for us and we're working very hard to try and figure out how to bring Saba degree so to patients as early in the treatment paradigm as possible.

Festival gives those patients' access to that combination of Italy.

And second of all to have them be on that combination for as long a period of time as possible. So that's what will drive the multibillion dollar growth.

And then Guoguang, maybe you could you could give a few comments on the on the guidance in China.

Yes, I think it would be.

No the recently issued.

The guiding principles for the ongoing joint development in China with <unk>.

It's really meant to discourage irrational repeated investment in certain targets as you know for instance.

The 1 in China.

It's a total of 80.90 different PD ones, we'll put into clinics.

And obviously this is.

The initial 1.2 or 3 nights.

They have.

A lot of the clinical value, but it won't get up to be.

All of those compounds will have diminished clinical value basically.

<unk> also recently no.

In the news as well.

The CD 19.

Car T.

There are over 150 programs targeting basically the same.

<unk> technology, CD 19 basic coffee so.

So the issue that the guidelines really to discourage this kind of approach in China.

Because of the diminishing plenty to valleys late comers.

You know, how we view that we think it's a it is a.

A major positive for us because this would be the.

Programs take up so much clinical resources.

And slow.

What has slowed down a lot of innovative programs.

Programs that we do everything we do we have very clear differentiation strategy.

Behind our programs and.

Everything is guided by <unk>.

Clinical value.

By signs basically so by cleaning up some of the some of these.

Barry.

Shifted investment in certain targets.

Well.

Free up space and resources for a truly innovative programs.

Programs.

Investing today.

So we really think it's a it's a positive for us.

Thanks, Alright, thanks Barbara.

Mark did.

Anything to add on the U S market differentiation.

Krishna I would add too building on what you said Rob.

Robustness and size of the portfolio on which we're just and.

There was a differentiator and I believe strongly can really up and create value to everyone.

You know obviously.

Do you have any kind of a competent without.

Amazing team.

And team, which is being built with the long term and a robust portfolio in mind. So we are building in our team.

<unk> team of seasoned individuals.

With a multinational large mid sized.

<unk> long history of excellent track records and that culture with paying off across.

It's a multiplicity of assets.

To bring to the market and the last part obviously, we are very ruthless looking at.

What and how we can create value too.

First of all patients and then physicians and payers and if we continue doing this across our portfolio, which can compete I think volume can be a significant trade up here.

Thanks Mark.

Okay. Thanks Louise.

Thanks.

Next question from David <unk> from Macquarie. Please go ahead.

Thank you very much congratulations Christian void, a very impressive first half.

You know it's been many years that you know you know the first half of this year really has so many positive news so I guess for.

A lot of investors..1 question is how can a second half of this year our top it off [laughter] can it be even more exciting that first half and what would be the key things that we should highlight on the upcoming a 4 to 5 months to continue to drive excitement in the company and 1 thing that I would.

Could think of is of course, all along the business development.

Area anything you can share with us in terms of maybe in the last few months with a stronger balance sheet any new initiative in the.

In the BD team.

What will be the focus of the potential products.

Pfizer.

Sizes that you are comfortable with and maybe the challenges that you have encountered so far announced last few months as you ramp up your P. D activities and I have 2 more questions. After this acquisition.

Okay. Thanks, David well I mean, yeah, it's been a great it's been a great.

6 months.

Yeah, Yeah yeah.

Yeah, you only have success that we've seen in the last 6 months because of the work of many years before that.

Great work of the team.

But I have to say over the second half of this year as.

As we talked about a little win when we laid out on page 35.

6 the upcoming events.

A lot going on and our teams are working flat out at the moment to deliver on our clinical progress on on these assets and I think as we do that youre going to see the real value of this company is is our is our.

Our ability to create genuinely differentiated assets on a global level.

Our clinical regulatory teams throughout the world keep keep moving in and CMC teams and everybody supporting.

That keeps moving youre going to see the value of these assets play.

So that's what I think is going to really take us to a completely different level is is our pipeline.

On the BD side, we are in discussions on a number of possible BD.

Transactions, obviously now from a cash standpoint, we were in the.

I'll be able to do some of these transactions.

But we're being very discriminating.

There are some fundamental.

<unk> boxes that need to be tick.

For us to engage on on potential in licensing for example.

And those.

Positioning.

Look we've got why gross and absolutely clearly for tower.

Portfolio strategy here of trying to build.

2 boxes of weapons to go after specific areas. So.

So we're not going to we're not going to.

Partner or license in any asset that is synergistic with our portfolio.

And it is not.

Very closely linked into the therapeutic areas of the indications that we're going after so that that sort of pipeline synergy is critical.

Those were the thing the second thing is you know we've seen them pretty.

Pretty significant inflation and in and the prices being paid for.

These these in licensing opportunities for China recently.

And so I think we're quite disciplined in that context.

I certainly won't be.

Going out and paying over the over the market and then we'll be disciplined there.

I think the third area that well, we'll have to the box and we'll have to take as you know synergy also with the commercial but it makes sense that if theres synergy with the pipeline that should be sitting.

We without commercial portfolio, but there may be some oncology assets, maybe that are not necessarily directly linked with a portfolio that our commercial team good could do well with it. So we're looking at some of those as well.

Yeah, it's it's ultimately it's about synergy and creating value I think also.

You know.

If we are going to partner it it's really not just about China, it's about trying to create value through combinations.

Globally and so that's another thing we will look at it. So yeah. We have a number that we're looking at but we are we're being very.

Very disciplined about it and I don't think you know we will not.

Proceed with with any of these licensing deals if they're not right for the company.

I think you know if they are right for us, we'll do them if they're not we won't we'll focus on on our own activities, but we've got a lot of a lot of discussions kind of underway at the moment.

Yeah. Thank you Christian.

If I may I'm just 2 more quick question. A question too is it's quite interesting that of course, you have done a great work in in launching fluke attendance and through but now with Astra helping out in the Apple what have you learned right I mean like for you guys is ramping.

And it was penetrating penetrating hospital education, but you know basically astrazeneca have done quite a bit of that last few years in China already so as you learn from you know Astra launching cycle like how how would you contrast, you guys I can't.

I'm, saying anything that you can learn from mass drop and you know maybe even ramping up hum for crew.

Sure at an even faster than what you have already then I'll say that's question too, but it's very simple.

Your next 3 in house product.

Develop much faster than you.

First 3.

Friday, which you of course have already launched and how do you compare this be that games.

Domestic players in terms of up to speed up clinical development in the smart itself do you kind of co strategy.

Thank you.

Right right Okay.

Okay, All I will I will answer the Astral question last.

Well to answer the.

The next 3 outlets to a political question.

And maybe Mike.

If you could comment on that with regards to I'm.

Not just inside China. So Astra is a is a just an amazing operator in China the biggest.

While T National pharmaceutical company in China that commercial presidencies is so deep.

They've done a tremendous job over the last 1.

10 years building building up their business in China, and it's led by some very very capable people.

I think in Hong.

Biggest smudgy, they're big advantages to greaser that they've been able to launch and really kind of take control of that not.

Market and that's very much related to several isn't there then and the clinicians that are prescribing saddle isn't there then the.

You know the plot.

I'm, calling it sounds like it needs to be maximized. So you know I have I have very high expectations from Astrazeneca I think we can learn a lot from Astra Astra do a terrific job.

Sort of bridging the gap between you know multinational mindset and local mindset.

And really you know using science and good discipline and great execution to make the most of their business. So we are learning a lot day in day out.

Our interaction with Astrazeneca, but we also have high expectations for their performance. So you know I'll I'll I'll be able to give.

For a little bit more perspective on that.

Maybe at our 6 months from now once I've got 6 months of watching them actually commercialize frequented travel isn't it but I have to say that decision making to this point.

They they haven't made any decisions, but I've disagreed with them. So.

No I really right Astrazeneca and I think we can learn a lot from them.

Whitewash Mirek any comments on the next 3 drugs.

Foster and China Foster outside of China.

Sure why go maybe you can start then I can build on that.

Oh.

Yes.

So I think that you.

You can look at our portfolio.

69 is already are in registration studies.

5 Q3 won't be there as well.

I think.

Looking at all earlier.

Portfolio I think.

Oh, yes.

<unk> 2 inhibitor has a has a chance to be ability to go to move very fast.

It's clearly differentiate it and.

All of them.

Uh huh.

It's built into the molecule and.

And we're already seeing it.

Activity in clinic.

Full time.

Yes.

Yes inhibitor.

Again, it's showing really interesting activity and also we are.

Initiating combos to the audio line.

We believe this is the.

The best strategy for FTF all compounds.

So all in all I think.

We have the <unk>.

<unk> 4 compounds.

Obviously, the $6.9 million.

But.

Every other compounds it has.

Has great opportunities.

Too to really move cross the finish line.

In the next few years.

Yes, so just a lot too.

From a global expansion perspective, if we apply 2018 as kind of starting point for even our lately.

When you look at the <unk> opinion, and proclaim opinion to develop and is moving very fast into global developed and then we were doing this despite the pandemic limitations. So.

So you're not even in that late we're going very aggressive on why.

Our new onset IV H <unk>.

Dwell inhibitor of our stake in <unk>.

<unk>.

5.2.

And our D PK those arent all in basis.

With high unmet medical need and pretty much with all potential for each of them going through accelerated approval path.

Because we will be aggressively looking at a signal of activity and benefit and Krishnan allude to program engaging with.

EBITDA on our 689 tricky Delta inhibitor in the second half of this year and that would be our kind of mode speeding up and looking for best place, where we can create the best clinical benefit for patients.

After approval.

All of these.

It's all in our rather screens.

To do it as fast as we can and in the right value creation mindset.

Thanks, Thanks Martin.

Thank you David.

Thank you.

Thank you.

Question from Paul Choi from Goldman Sachs. Please go ahead.

Yeah.

Hi, Thank you and good morning, everyone 2 questions from Us please.

First Christian with regard to your earlier comment that you'll you'll decide on the phase III trial for <unk> plus <unk>.

Mcnabb.

In the next month have you and Astra looked at updated data from the from the Savannah trial.

Label and can you maybe just confirm if you've seen any differences with regard to the tune of 300 dose either 300, Meg dose either on efficacy or tolerability.

And then my second question is you mentioned, you'll have a rather fulsome update on 689 at the Ash meeting at year end can you maybe just frame expectations for US are you largely positioning. This is initial safety or safety data or are you largely looking for clear evidence of.

Efficacy differentiation versus the other drugs in the class. Thank you very much.

Thanks, Paul I'll take the first 1 on degrees a gamba and then I'll ask why go on my right to talk about ash.

689, so on on Savannah.

You know the answer to your direct question have we seen any any further data the answer to that is no we have a cutoff.

That I think it was in July we'll be seeing or astrazeneca will be seeing.

Sufficient data.

In August maybe late August to inform the design of the phase III and that will include a further data around the 3.

300 milligram B I D. The 600 milligram QD and.

You know, obviously that the 300 milligram.

The Q D.

Dose cohorts.

Well, it's going to be really important also Israel will get a first look at mature PFS.

We haven't seen mature PFS really a toll from Savannah, and it's very important.

And I think also the biomarker analysis, that's being done because it's a big patient population now.

You know that I have here.

Got it all up it's going to be closing in on maybe a 170 to 200 patients. So you know the final biomarker analysis, when combined with the type of data and the biomarker analysis from talking.

The biomarker strategy for the phase III. So yeah in the next couple of months, we should have all of that and then Astra will go through its own internal processes to you know to finalized protocols and to finalize internal governance and you know we're hoping that.

We could see the global page kicking off later in the year. That's that's the.

On the cyber breach of contract, but Meanwhile, why growing the team all moving very.

Very rapidly on the Sochi study and the Synovus study both.

Combos with <unk>.

To start registration studies in China fade.

Phase III registration studies in China.

That should kick off in September October timeframe, maybe October time frame.

So oh I'll hand, it off to why going to talk about 689 sort of expectations for potential data at.

At Ash and maybe merit.

To that because of the global study he's he's got underway.

Well, Okay, Paul I think the short answer for that.

Keep differentiation sits in on is actually its no its severity or.

Both in terms of efficacy and N.

So as.

As you know, we already published a dose escalation data at 20, a tornado ash.

Uh huh.

Across all dose levels.

And Oh.

Subtypes.

Lymphoma, we saw 48%.

There's a law and.

No.

What was that we've been doing through the dose expansion we have oh.

Now dose of well over 100 patients.

Our recommended phase II dose and a re us obviously some much better.

Even more.

Improved efficacy.

You'll have to wait until we publish it of course.

Now the details.

By the way.

I guess I think Chris you mentioned that.

I only want ash.

Actually we'll be earlier than that.

The menu is the presentation everything accepted by eligible.

And it will be an oral talk at ESMO this year.

Just a couple of months.

In the data.

Yes.

Also in terms of.

Ricky profile.

We are.

So 2019.

To.

Hum.

But definitely from others just for your Delta inhibitors, particularly in terms of the Gi talks.

As.

Well as the liver tox profile.

This this drug will be used.

In the patient population for <unk>.

Really long durations the safety.

Safety profile is extremely important and we are really happy with the.

The safety and the tolerance.

Quality of 60.

609 so.

And what we what we are.

So in the Chinese patient population and what Barrick is seen with <unk>.

Without with all of our international program very consistent both things.

Across the board in terms of PK safety hadn't.

Half of the seats.

Maybe American chartered.

Yes, I would just the only answer.

Tony I agree with the right data.

Nice consistent and we believe that we can differentiate based on the both face to face.

And what.

What we see is very encouraging.

As far.

Paul Graham Christian on the kind of alluded to entire package we are looking at.

Both China and.

The historic data, which is.

Ongoing and now in the registration phase 2 in China, we are expanding all the time or ongoing international.

So between 3 someday, we'll have never about pockets as it continues to mature and obviously every.

Possibilities, where we can provide meaningful analysis would be doing that.

And while we are discussing with regulatory agencies.

From the encouraged them.

What I can say.

Thank you very much for taking our questions.

Sure Paul.

Thank you next question from Mike Mitchell from Panama Goldman. Please go ahead.

Thank you.

Christine I just got 1 question relationship.

Pipeline strategy, which perhaps slips theory of BD quick question on its head I hope he imaging collaborations are particularly interesting relationship to advance a number of your earlier stage assets. So I'm. Just wondering now that your increased financial resources, perhaps allow you to think about supporting more complicated but potentially more interesting.

That's much more valuable program, so because all combinations of molecules, where you might have otherwise looked at monotherapy. So prostate de prioritizing the monotherapy strategy across the pipeline might you taken imaging type approach.

For what would otherwise have been those mono therapy programs, especially if you're staying in place points system.

Sticking with licensing in China.

Thanks, Mike.

So I mean basically you Gotta get you got to get your monotherapy approved forever at 1 of our assets.

Ultimately that's the first step is you've got a you've got to find the more mono therapy indication to get it approved then.

And once you've derisked and asset through Ah Ah.

Monotherapy approval, then combination you can explore and go into all kinds of areas.

In some cases like sample it to them you know almost kind of kick in.

Yeah.

So I I I I don't believe that.

We would ever be.

Is getting getting a mono therapies approved.

Thank the financial.

You know platform that we've built now with the Hong Kong listing in the you know the cash.

Resources have available are.

Really all sufficient to allow us to do pretty much what I really wanted to do.

With a portfolio of assets and you know the pipeline that's laid out on I think slide 3 or 4 I'm you know, it's a deep pipeline now 11 and 12.

The 13 assets.

That will be we'll be developing very broadly we have as you mentioned decided.

On the immunology side too.

Kind of makes that the line in the sand and say okay. We are we are creating immunology innovations, but with regards to developing those assets its not the financial limitations. It's more the the the fact that immunology is quite different.

Different hormone college in terms of development and we believe that imaging brings focus and the ability to to really harness kols in the in the immunology space globally that are that are going to be able to move those programs, possibly quicker than we could give.

They focus so strongly on oncology, so I hope that answers your question I mean I I.

We certainly wouldn't be de prioritizing monotherapy development of any of these assets.

No that's fantastic Thanks Christian.

Thanks, Mike.

During 2 in northeast.

The question from telephone and we will take and final question from the web the question Red point more actually SVP corporate finance in the Brooklyn. So please go ahead.

Greg we have a question from Sean <unk> with Morgan Stanley and so I'll just read it out.

Right now your frequent to nib and PD 1.

All flows are exploratory moving forward do you intend to tightened the screws and rework collaboration agreements are you free to pursue global collaboration of settlements with PD 1.

Okay. Thanks, Mark Thanks, Sean.

Listening.

So.

For the for Clinton and PD 1.

Combos.

So because I've listened to PD, 1 combos, yes, its exploratory.

But as you can see these are these are actually relatively robust size phase 2 studies.

With multiple cohorts in multiple indications.

You know maybe 2030.

Patients are 2 to identify signals of efficacy and obviously the tolerability of the Commerce and you know now why go into the team of moving those rapidly into into registration studies.

The way all of our collaborations.

We've set up.

Is that in the early stages of development sort of phase II and proof of concept. These are nonexclusive relationships, but when we do go into registration studies.

They become exclusive and.

Cost sharing in 1 way or another so.

<unk>, where we're making that change or that step change as far as the way we work with.

It happened with the journey at the moment and discussing how to restructure these registration studies and who pays for what and who does what so yes. The answer to your question is yes.

Weak collaborations do evolve from this exploratory sort of known nonexclusive exploratory structure into a more exclusive.

Our structure around registration studies.

And the answer on <unk> is is no [laughter], we're not free to.

Our combined.

With PD ones outside of China, but that said astrazeneca.

Has it been read the PDL, 1 antibody and we you can see that where we're aggressively moving that combination of sovereign kinsey into a into global phase III.

I suppose papillary renal cell carcinoma, and we do see as I showed earlier on the Calypso dates as a 57% response rate in met positive.

Patients, we do see a very high degree of synergy between those 2 assets.

I just saw 1 plus 1 equals 2 it's 1 plus 1 equals probably 4.

And.

That synergy as it plays out in PRC I'm sure will look.

2 other other opportunities to develop several.

Listen I've been in Quincy together and in other indications so, but we'll do that in partnership with Astro, we won't do anything sort of separately on our.

Hopefully that answers your question.

Yeah.

Okay, I think than a Greg it is is that all of the questions.

Yes, we don't have any more question by phone.

Okay, Great well then on behalf of the entire.

Hutch Med team Marek why Guo Johnny Mark.

And myself. Thank you all very much for joining our call and we look forward to.

Engaging with you all.

In the coming months, but the next 6 months will be very important 6 months for <unk>.

Right.

You know I think we're all feeling very positive about the future. So thanks very much for listening in.

Thank you very much.